Foxconn Looking at “Life Far, Far Beyond Apple” – Report

By: Ali Raza  |   May 8th, 2013   |   Apple, Business, iOS, News

In the past several observers have claimed that Apple’s long time partner Foxconn depends too much on the Cupertino-based company for its revenue, which could be judged from the fact that the Taiwan-based company has often saw a drop in its income whenever the iOS device maker lowers its production order or its sales slow down. This is why Foxconn is now looking at way to diversify and “It is contemplating life far, far beyond Apple.” These thoughts regarding the future of the Taiwanese company were shared by the chairman of Foxconn, Terry Gou and it was reported by The New York Times in a recent publication. According to the report business with Apple is negatively affecting the proceeds of the company.

 

“To put that into numbers, Foxconn’s first quarter revenue dropped 19.2% on a year-over-year basis, which was heavily affected by the company’s reliance on Apple, which is estimated to be contributing about 40% of Foxconn’s revenue.”

 

An analyst, Jamie Wang from research firm Gartner said that, “Foxconn senses that the Apple aura isn’t as invincible as before. So they are worried that they need something besides Apple’s business that will allow them to grow.”

 

Spokesman of Foxconn, Simon Hsing said that, “The decline in the business of our partners, such as Apple and Nokia, does affect us. We don’t want to just wait for orders. We are actively talking with many clients and asking if they can fully utilize what we make.”

 

Although, moving away from Apple can cause difficulties for Foxconn, but the chairman of the Taiwanese company is confident that the corporation has the fuel to move forward, make products for other companies and even develop its own range of products.

 

One possible product that Foxconn could develop is big flat screen TV and the reason to believe so is that the Taiwanese company has bought a 37.6 percent stake in LCD panel factory of Sharp in Sakai, Japan.

 

“So what do you do in the meantime after spending about $840 million buying a plant?” said Thompson Wu, an analyst at. “You just say, I have to decide whether I’m better off making TVs at a discount and make less money incrementally or having manufacturing not doing anything.”

 

Barclays’ Asia Technology Research managing director, Kirk Yang said, “Taiwanese companies will do this all the time.”

 

He also said that, “They will sell at loss just to get their foot in the door. With larger volume, better scale and more experience, they eventually make a small profit.”

 

However, at this point in time Foxconn’s television business is below 5 percent and so far luck has favoured the company in the 60-inch television category, but to do well in the TV market Taiwanese company will need to lure a large number of TV customers, according to analysts.

 

Source: iPhoneinCanada